Xbox Next-Gen Details — Full Breakdown & Transcript

[00:00] We have a ton of new details about the next generation of Xbox. So, Archie Sharma just did an interview with Fortune and casually dropped a huge amount of new details. Such as, there's a handheld Xbox console that's launching next year.

[00:14] Details about Project Helix and it's a very expensive price tag. The idea that Game Pass will likely be completely changed to be an a la carte service. There's a ton, a ton of stuff to dive into. So, let's start out by talking about the handheld console.

[00:28] The big story here is not only that Xbox is bringing out their own handheld console, which is separate from some of the Xbox Ally, but it also will be targeting Holiday of Next Year, so 2027. And one thing to think about this timing is that this is actually going to be the first of the

[00:42] next generation Xbox devices. As Project Helix, the next generation of the Xbox Series X, is targeted for Holiday 2028, so a full one year later. Now I find this to be fascinating on a number of fronts. First of all, there's already an Xbox handheld, and it's called the Xbox Ally.

[00:58] It launched last year, and of course that was before Asa took over, and there's clearly been an Xbox reset since then. But even right now, I've actually been using the Xbox Alloy X20, which just launched. And I will say that that's actually a fantastic device.

[01:11] Now, it is very expensive. It is $1,300. But it also feels like one of these devices that is Xbox in more name than actual experience. When Windows handheld really hit the mainstream a few years ago with the original ROG Alloy,

[01:25] Windows sucked on handhelds. It was really, really bad. But with the Xbox Ally, they made a significant step forward with the full screen mode and it still wasn't great last year when the Xbox Ally launched, but having just used

[01:37] the Xbox Ally X20 and the most recent software, I'll say the Windows is a lot better than it used to be. I can put games to sleep and wake them up and they generally work pretty well. But by that same token, I understand that the Xbox

[01:49] team want to own this project for actually I think a really simple reason. I mean you can argue that the idea that this is going to be running Xbox OS will give you better performance and you know you'll be able to give you battery life improvements and it's certainly going to

[02:02] come straight to the point and whatnot but I think the real answer is money. If I buy an Xbox Ally of course it defaults to the Xbox app I can load stuff up from different third parties but odds are I'm going straight to Steam. I'm buying my games on Steam and that's really where the

[02:18] money is when it comes to hardware these days. Then if they ship it with Xbox OS the only way get content is through Game Pass and by buying games from the Xbox store and I understand that is a very compelling reason. So to me the handheld story is incredibly interesting and the fact that

[02:33] this is the lead console for this next generation I think is also a really big tell. If you look at how successful the Switch has been and especially the Switch 2 it is really the only current generation console which you can kind of recommend at this point. I think this next generation is

[02:47] going to leave handheld first and the big boy console second and what I mean by that is if you you look the Xbox for this generation right so the Series S and the Series X for the most part games have been designed for the Series X and PS5 and then they kind of like get ported down to the Series S

[03:03] and the Series S is there but a lot of games have not run incredibly well on it but I think that's going to be flipped this generation I think the handheld is going to be the main device not only of course on the Nintendo side but on the Xbox side and especially on the PlayStation side for

[03:15] a couple of reasons. These things are monstrously expensive thanks to the RAM prices right now, but all those things can be significantly cheaper when you're running on a handheld. You don't need as much RAM, you're running at lower resolutions, you've got less storage space, and presumably the

[03:28] actual chips themselves, which are not only going to be power efficient to fit in that, but also they're going to be way, way cheaper to make because they're smaller. And I think the rumor of PS6 Portable is kind of the elephant in the room here, because one of the issues with that console is that it is not going to be likely as powerful as the base PS5, which means the games

[03:44] won't work out of the box. That's why, at least from what I've heard, the PS5 has gotten that power saver mode, and that if you tune your game to the power saver mode on the PS5, it will work on the PS6 portable. Well, guess what? Microsoft doesn't have to worry about that, because they

[03:57] already have been shipping the Series S since 2020, and presumably any Series S game would work on the portable, and obviously it will have the additional features like the brand new FSR and all this kind of stuff to help take advantage of games that are natively designed for it. A lot of the

[04:11] the headlines, though, has been focused around Xbox's Project Helix, so the follow-up to the Xbox Series X, and the big headline is the price. So, according to the interview, Asha said that it

[04:23] will cost between $1,200 and $1,800 when it goes on sale holiday of 2028, so a couple of years from now. I want to throw a little bit of cold water on that. Now, obviously, this is just me speculating,

[04:36] But I think there's a couple of things that the headlines mix here. First of all, $1,200 to $1,800 is a massive range. No one, not even Xbox, has the crystal ball to know how bad the RAM price is over the next two years.

[04:48] So I wouldn't be surprised if that massive range is, you know, best case versus worst case. But there's an important bit of context there, which is it would cost $1,200 to $1,800 without a subsidy.

[05:00] Spoiler alert, Microsoft has subsidized every single Xbox they have ever sold over the last 25 years. So the idea is, unless this thing is running Windows, which it maybe will, but it's a little hard to say,

[05:13] if this thing is running Xbox OS, I'm going to guess that there will be some subsidies involved to bring that price down. I also think that it will probably be creative when it comes to maybe bundling it with like, oh, you sign up for two years of Game Pass and you knock off a couple hundred dollars,

[05:27] or there's some payment plan or whatever. I think, and maybe this is the cynical part of me, this number was casually mentioned in an interview to set everyone's expectations that it will be sky-high expensive and the reality is that it will hopefully be

[05:40] somewhat more reasonable but also if your company and you guessing that your product will be between and to me that really does we have no idea how the hell expensive it's going to be in two years.

[05:52] Because guess what? No one has any idea how expensive anything is going to be in two years, right? And then there's Game Pass. So, again, just casually mentioned as far as they're just going to, oh, I don't know, totally change their business label, could do something

[06:04] totally different. So, if you subscribe to Game Pass right now, there's a few tiers, and depending on which tier you're on, like how many games you get, how early the access is, how many hours of cloud gaming you get. It's like a few things. It's fairly standard stuff.

[06:17] But what they're proposing to do, we'll see when it actually sort of rolls out, is to break it up a la carte. So, for example, Game Pass would have an option to, say, pay for cloud gaming. There'll be an option to pay for online gaming, a la, like, Xbox Live.

[06:31] There'll be stuff like day ones, or how many games you get, or PC games, or maybe there's a Call of Duty bundle, or a Minecraft bundle. Now, obviously there's not the actual prices and tiers here, so we've got to speculate a little bit.

[06:45] But I do think it's interesting, and I think it's probably the right move. Because while Game Pass for the last 5, 6, 7 years or so has really been very clearly the focus for Xbox, and it is a meaningful driver of revenue,

[06:59] the problem is that it kind of sets these weird perverse incentives for developers. Because, for example, take Gears of War E-Day, right? one of the first big exclusives to come back to Xbox. Well, the rumor is that it sold almost no copies on Xbox.

[07:15] It sold on Steam, and presumably a lot of people played it via Game Pass. But as far as people who actually bought a copy on Xbox, very, very few. And very famously, last year, when COD launched, it launched inside Game Pass,

[07:28] and Game Pass subscriptions didn't really go up, and not anywhere near as many sales of Call of Duty came because a lot of people just downloaded it, played on Game Pass, and ditched. So, I think it makes sense for them to unbundle this stuff, and they can sort of price each tier exactly where you want it.

[07:43] And if all of this wasn't enough, also today, there was an announcement from AMD. They're bringing out FSR 4.1 to a wide variety of PC graphics cards, but importantly, also Xbox consoles.

[07:55] This includes the AliEx, but more importantly, the Xbox Series X and the Series S. Now, if you're not familiar, AMD's FSR technology is a way to upscale gaming. At this point, essentially every single game is using some form of upscaling.

[08:07] Generally speaking, NVIDIA's DLSS is kind of the gold standard. And while previous versions of FSR that the consoles run right now aren't exactly great, FSR 4.1 promises to actually give you a meaningful bump to graphics,

[08:20] which means that you can run games at higher resolutions or potentially push higher frame rates. Like, it is not necessarily like download a patch and get free performance, but it's kind of like if you add a patch, you download some more performance.

[08:32] So this is actually very similar to what Sony just did with the base PS5 where they rolled out 2SSR which is their own form of upscaling for the base PS5 If you imagine getting my GTA 6 running on an Xbox Series X would it run on day one Of course

[08:49] But, I'm a little worried that maybe that's going to look a little blurry. But if you have a little bit of extra upscaling to make that, say, 720p image look a whole lot cleaner and crisper, I feel like it's nothing but a win. It will help extend the lifespan of these existing consoles.

[09:03] And if all of that wasn't enough, there's a listing for an Xbox Game Surprise Strategist role. Now, if you would think that the Xbox team are winding down physical games the way that Sony are, it would be a very interesting decision to hire someone dedicated to physical games, wouldn't it?

[09:20] Now, to be fair, the Xbox team also make, oh, I don't know, Call of Duty for Switch 2? Then maybe that's what this job is for. but it does make me think that it's a very wide open goal for the Xbox team to put some fig leaf

[09:35] out to people who want to keep physical games alive. I mean, they already did that to a degree earlier this year, just a month or two ago, when they allowed you to take your physical games and turn them into digital copies that you could play anywhere. I mean, I think that was just nothing

[09:47] but an absolute win. And if there is some way they can keep physical games going into the next generation, there is no doubt in my mind that people will be incredibly stoked. Now, what does that look like? I don't think it's discs. I think the same reason that Sony are turning discs is

[10:02] actually for a really valid reason, and that disc drives are becoming more expensive, there are fewer suppliers, the discs themselves, while there are still factories around, is becoming a more and more untenable thing, especially if you commit to making discs for the next 10 years for the next

[10:15] generation. But if you could replace this with, say, a Switch-style cartridge, a microSD card, a USB, there's a lot of ways you could do this, and even if these games take the form of something like a Switch keycard,

[10:27] I know people don't love them, but if our options are a physical little keycard that just helps you download the game as essentially a physical manifestation of your license, or nothing at all, I think people would take

[10:39] at least something. I'm excited. I'm very, very curious to see what the handheld looks like, right? I personally think that that's the most exciting and the most important thing here. I know the headlines are all about the $1,800 Helix,

[10:53] and the Helix will be great, just like the PS6, but I don't think that people are going to be spending a thousand plus dollars on consoles. Like, some people will, it'll be great, but I think the majority of this generation are going to be in the handhelds, which are hopefully a lot

[11:05] closer to the price of the Switch 2 than an Xbox Ally X1. Now, speculation on my side, but let me know what do you think about this just casual like oh next generation here's all our plans

[11:19] and interview thing i'll say that was not my plan to talk about that day but you know what life is your lemons you make mountain dew i will take no further questions